PARAS SUNDERJI DEDHIA, MUMBAI V. ITO 13(2)(4), MUMBAI

ITA 6782/MUM/2013

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8986 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 20-07-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 25-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITTAL
• Assessee Lawyers: SAILESH PARMAR
• Keywords: Unexplained cash credit
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C MUMBAI BEFORE SHRI JOGINDER SINGH (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 6782/MUM/2013 ASSESSMENT YEAR: 2009 - 10 PARAS SUNDERJI DEDHIA 18, MABELLE MANSION, CENTRAL AVENUE, ROAD OPP. COSMOS BANK, CHEMBUR MUMBAI - 400071 VS. ITO - 13(2)(4) AAYAKAR BHAVAN MUMBAI P AN NO. ADWPD1180H APPELLANT RESPONDENT ASSESSEE BY : MR. SAILESH PARMAR , AR REVENUE BY : MR. RAJAT MITTAL , DR DATE OF HEARING : 24 /08/2017 DATE OF PRONOUNCEMENT : 03/11/2017 ORDER PER N.K. PRADHAN, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE. THE RELEVANT ASSESSMENT YEAR IS 2009 - 10 . THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISS IONER OF INCOME TAX (APPEALS) - 24 , MUMBAI AND ARISES OUT OF THE ASSESSMENT COMPLETED U/S 143(3) OF THE INCOME TAX ACT 1961, (THE ACT). PARAS SUNDERJI DEDHIA ITA NO. 6782/MUM/2013 2 2. THE G ROUND OF APPEAL FILED BY THE ASSESSEE READ S AS UNDER: THE ADDITION OF RS.9,56,686/ - MADE BY THE LD. ASSESSING OFFICER (AO) AND THE LD. COMMISSIONER OF APPEALS 24 MAY BE DELETED. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT ASSESSING OFFICER (AO) FOUND FROM THE AIR INFORMATION THAT THE ASSESSEE HAD DEPOSI TED DURING THE YEAR UNDER CONSIDERATION TOTAL CASH OF RS.13,20,700/ - AND RS.10,54,200/ - IN HIS BANK ACCOUNT WITH THE COSMOS BANK LTD., PUNE AND ICICI BANK LTD ., BANDRA KURLA COMPLEX, MUMBAI . THE AO ADDED THE ABOVE CASH DEPOSIT OF RS.23,74,900/ - U/S 68 AS UNEXPLAINED CASH CREDIT TO THE INCOME OF THE ASSESSEE. 3.1 THE DISPUTE IN THE PRESENT APPEAL IS THE DIRECTION GIVEN BY THE LD. CIT(A) TO THE AO TO TAX ONLY RS.9,56 ,686/ - . THE LD. CIT(A) HELD AS UNDER: NEVERTHELESS, AS PER MY FINDING GIVEN IN PREPAR A S THE AMOUNTS CLAIMED TO HAVE BEEN RECEIVED FROM 38 LOAN CREDITORS HAVE NOT BEEN ACCEPTED AND CONSEQUENTLY THE REPAYMENT OF AMOUNTS TO LOAN CREDITORS HAS ALSO BEEN IGNORED FROM THE CASH FLOW STATEMENT. ACCORDINGLY, THE PEAK NEGATIVE BALANCE IS WORKED OUT. IF THE DEPOSITS AND WITHDRAWALS SAID TO BE PERTAINING TO THE 38 LOAN CREDITORS ARE IGNORED , THE PEA K NEGATIVE BALANCE WOULD BE RS. 7,56,686/ - AS ON 14/10/2008 FOR THE YEAR UNDER CONSIDERATION, AS PER THE CASH FLOW STATEMENT. IN OTHER WORDS, THE ASSESSEE DEPOS ITED HIS OWN MONEY IN THE BAN K ACCOUNTS TO THE EXTENT OF RS. 7,56,686/ - WHICH DID NOT HAVE ANY SOURCES. THUS, THE AMOUNT HAS TO BE TAKEN AS UNEXPLAINED CASH. FURTHER, IT IS TO BE MENTIONED HERE, THAT THERE WERE SOME WITHDRAWALS MADE AT ATM'S WHICH CANNOT BE TAKEN AS AMOUNTS AVAILABLE FOR CASH DEPOSITS FOR THE REASON THAT THEY ARE GENERALLY DRAWN IN DIRE NECESSITIES. HOWEVER, GIVING BENEFIT OF DOUBT TO THE ASSESSEE, IN THE ABSENCE OF ANY CONCLUSIVE EVIDENCE, THAT THESE WITHDRAWALS OF ATM'S WERE USED FOR PERSONAL PURPOSES, THEREBY, NOT PARAS SUNDERJI DEDHIA ITA NO. 6782/MUM/2013 3 AVAILABLE FOR DEPOSITS. ONLY A SU M OF RS. 2,00,000/ - IS CONSIDERED, NOT AVAILABLE AS SOURCE (TREATING AS DRAWINGS/PERSONAL EXPENSES), OUT OF TOTAL WITHDRAWALS OF RS. 3,28,400/ - THROUGH ATM'S. THUS, RS. 7,56,686 + 2,00,000/ - IS CONSIDERED AS UNEXPLAINED INCOME OF THE ASSESSEE. THEREFORE THE A SSESSING OFFICER IS DIRECTED TO RETAIN ONLY RS. 9,56,686/ - AND THE BALANCE AMOUNT HAS TO BE DELETE D. 4. BEFORE US, THE LD. COUNSEL OF THE ASSESSEE FILES A COPY OF THE CASH BOOK FOR THE PERIOD 01.04.2008 TO 31.03.2009 AND COPY OF THE REMAND REPORT BY THE A O DATED 06.06.2013. IT IS ALSO SUBMITTED BY HIM THAT THE ASSESSEE HAS BEEN OPERATING TWO SAVINGS BANK ACCOUNT I.E. ONE IN ICICI BANK AND THE OTHER IN COSMOS BANK. IN MOST OF THE CASES, THE ASSESSEE HAS WITHDRAWN CASH FROM ICICI BANK AND DEPOSITED CASH IN C OSMOS BANK AND THE SAME WAS EXPLAINED TO THE AO AS WELL AS THE LD. CIT(A). HOWEVER, THEY WERE NOT FULLY SATISFIED AND THE APPEAL WAS PARTLY ALLOWED CONFIRMING AN AMOUNT OF RS.9,56,686/ - . THE LD. COUNSEL FURTHER SUBMITS THAT THE ASSESSEE HAS TAKEN CASH LOAN FROM 38 PARTIES FOR WHICH HE HAS SUBMITTED COPY OF ACKNOWLEDGEMENTS FILED BY THEM. HOWEVER, THE LD. CIT(A) HAS MENTIONED IN HIS ORDER THAT HE COULD NOT VERIFY THE SIGNATURE OF LOAN CONFIRMATIONS WHICH HAVE BEEN SUBMITTED BY THE ASSESSEE IN SUPPORT OF THE CLAIM OF CASH LOANS. 5. ON THE OTHER HAND, THE LD. DR SUPPORTS THE ORDER PASSED BY THE LD. CIT(A). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORDS. THE REASONS FOR OUR DECISION ARE GIVEN BELOW. PARAS SUNDERJI DEDHIA ITA NO. 6782/MUM/2013 4 IN APPEAL, THE LD. CIT(A) FOUND (I) THE COPIES OF CONFIRMATION LETTERS CLAIMED TO HAVE BEEN SIGNED BY THE ALLEGED LOAN CREDITORS COULD NOT BE TALLIED WITH SIGNATURES APPENDED ON THE COPIES OF RETURN OF INCOME FILED BY THE ASSESSEE, THEREFORE, THE IDENTITY OF THE CREDITOR IS NOT FULLY ESTABLISHED, (II) AS REGARDS CREDITWORTHINESS, THERE HAS NEVER BEEN ANY STATEMENT/PERSONAL APPEARANCE BY THE LOAN CREDITORS STATING THAT THEY HAD ADVANCED THE AMOUNT, (III) THE ASSESSEE HAS NOT PRODUCED ANY BALANCE SHEET OR CAP ITAL ACCOUNT OR LEDGER OF THESE ALLEGED LOAN CREDITORS TO PROVE THAT THE ASSESSEES NAME WAS APPEARING. WE REFER HERE TO PAGE 15 OF ORDER DATED 23.08.2013 PASSED BY THE LD. CIT(A). IT IS WELL SETTLED THAT IN ORDER TO DISCHARGE THE ONUS WITH REGARD TO CASH CREDIT, THE ASSESSEE MUST PROVE THE FOLLOWING: (I) THE IDENTITY OF THE CREDITOR, (II) THE CAPACITY OF THE CREDITOR TO ADVANCE MONEY; AND (III) THE GENUINENESS OF TRANSACTION. THE HONBLE SUPREME COURT HAS LAID DOWN IN KALEKHAN MOHAMMED HANIF VS. CI T 50 ITR 1 (SC) THAT THE ONUS IS ON THE ASSESSEE TO EXPLAIN THE NATURE AND SOURCE OF CASH CREDITS, WHETHER TH AT STAND IN THE ASSESSEES ACCOUNT OR IN THE ACCOUNT OF A THIRD PARTY. IN VIEW OF THE ABOVE POSITION OF LAW, WE SET ASIDE THE ORDER OF THE LD. CI T(A) AND RESTORE THE MATTER TO THE FILE OF THE AO TO RE - EXAMINE IN THE LIGHT OF OUR OBSERVATION HEREINBEFORE AND THEN MAKE A FRESH ASSESSMENT OF THE ABOVE ISSUE AFTER GIVING REASONABLE OPPORTUNITY OF PARAS SUNDERJI DEDHIA ITA NO. 6782/MUM/2013 5 BEING HEARD TO THE ASSESSEE. THE ASSESSEE IS DIRECTED TO FILE THE RELEVANT DOCUMENTS/EVIDENCE BEFORE THE AO. 7. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 03/11/2017. SD/ - SD/ - ( JOGINDER SINGH ) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 03/11/2017 RAHUL SHARMA, SR. P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI